I just received an offer from Stephens Land Services in Norman, OK to lease 12 acres in Okfuskee Co. 14-11N-11E for $200 bonus, 3/16 royalty, and a 3-yr. lease. I asked for standard Exhibit A clauses and they sent them back with three of them deleted ("Commencement," "Cessation, Drilling, and Reworking," "Separation of Liquids") and part of the "Limited Warranty Clause" was deleted as well. (See attached--they crossed out what they won't accept).
I found this set of Exhibit A clauses here at the MI Board, and they've all been accepted by other companies. When I asked the landman why these clauses weren't accepted, I got the following response:
The reason for striking through the Commencement clause is because it restricts the drilling. The drilling company wants to drill as quickly as the mineral owner, but certain things may prevent this from happening within the timeframe of the commencement clause. They don't want to be out any time or expense either.
And the Cessation, Drilling, and Reworking-along the lines of the commencement clause, too restricting.
Limited Warranty-They will not agree to the last part because they will not be responsible for those payments.
Should I refuse their offer based on their not accepting the entire set of Exhibit A clauses?
Thank you in advance for any advice you can offer.
--Angela148-MaryG.HavelTrustExhibitAClausesforoilandgasleases_Changes.docx (17.3 KB)